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Use the Following Selected Financial Information for Wilcox Corporation to Answer

question 49

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Use the following selected financial information for Wilcox Corporation to answer questions . Wilcox Corporation
Income Statement
For the Year Ended December 31,2015
 Net sales $2,870 Cost of goods sold 1,985 Gross profit $885 Operating expenses 620 Operating profit $265 Interest expense 40 Earnings before taxes $225 Income tax expense 80 Net profit $145\begin{array}{lr}\text { Net sales } & \$ 2,870 \\\text { Cost of goods sold } & 1,985\\\text { Gross profit } & \$ \overline{885} \\\text { Operating expenses } & 620\\\text { Operating profit } & \$ 265 \\\text { Interest expense } & 40\\\text { Earnings before taxes }&\$225\\\text { Income tax expense }&80\\\text { Net profit }&\$145\end{array} Wilcox Corporation
Balance Sheet
December 31, 2015
 Assets  Liabilities and stockholders’ equity  Current assets  Current liabilities  Cash $25 Accounts payable $85 Short-term investments 15 Accrued liabilities 45 Accounts receivable 70 Total current liabilities 130 Inventory 150 Long-term debt 240 Total current assets 260 Total liabilities 370 Long-term assets  Stockholders’ equity  Net PPE 390 Common stock and PIC 80 Goodwill 210 Retained earnings 410 Total stockholders’ equity 490 Total assets $860 Total liabilities and equity $860\begin{array}{lclr}\text { Assets }&&\text { Liabilities and stockholders' equity }\\\hline\text { Current assets }&&\text { Current liabilities }\\\text { Cash } & \$ 25 & \text { Accounts payable } & \$ 85 \\\text { Short-term investments } & 15 & \text { Accrued liabilities } & 45 \\\text { Accounts receivable } & 70 & \text { Total current liabilities } & 130 \\\text { Inventory } & 150 & \text { Long-term debt } & 240\\\text { Total current assets }&260&\text { Total liabilities }&370\\\\\text { Long-term assets }&&\text { Stockholders' equity }\\\text { Net PPE } & 390 & \text { Common stock and PIC } & 80 \\\text { Goodwill } & 210 & \text { Retained earnings } & 410\\&&\text { Total stockholders' equity }&490\\\text { Total assets }&\$860&\text { Total liabilities and equity }&\$860\end{array} WilcoxCorporation
Statement of Cash Flow Information
For the Year Ended December 31, 2015

 Cash from operating activities $150 Investing activities:  Capital expenditures $60 Acquisitions $10 Financing activities:  Proceeds from long-term borrowing $50 Payments on long-term borrowing $25 Payments of cash dividends $20 Cash paid for interest $10 Cash paid for income taxes $75\begin{array}{ll}\text { Cash from operating activities }&\$150\\\text { Investing activities: }\\\text { Capital expenditures } & \$ 60 \\\text { Acquisitions } & \$ 10\\\text { Financing activities: }\\\text { Proceeds from long-term borrowing } & \$ 50 \\\text { Payments on long-term borrowing } & \$ 25 \\\text { Payments of cash dividends } & \$ 20\\\text { Cash paid for interest } & \$ 10 \\\text { Cash paid for income taxes } & \$ 75\end{array}
-Wilcox's return on equity is:


Definitions:

Intrinsic Value

Intrinsic Value is the actual value of a company, stock, currency, or product determined through fundamental analysis without reference to its market value.

FCFE

Free Cash Flow to Equity, a measure of how much cash is available to the equity shareholders of a company after all expenses, reinvestment, and debt payments have been made.

Intrinsic Value

The actual, fundamental value of an asset, determined through analysis of fundamentals, without considering market value influences.

FCFE

Free Cash Flow to Equity, a measure of how much cash is available to the equity shareholders of a company after all expenses, reinvestment, and debt are paid.

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